A.M. Best Removes Ratings of The Insurance Company of Prince Edward
Island From Under Review

July 02, 2014 02:34 PM Eastern Daylight Time

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with negative
implications and affirmed the financial strength rating of B++ (Good)
and the issuer credit rating of “bbb” of The Insurance Company of
Prince Edward Island (ICPEI) (Prince Edward Island, Canada). The
outlook assigned to both ratings is stable.

The ratings of ICPEI were placed under review with negative implications
in April 2014 following the disclosure that EGI Financial Holdings
Inc. (EFH) (TSX:EFH) had entered into a definitive agreement with SGI
Canada (SGI) to acquire SGI’s share of ICPEI.

The rating actions follow the completion of the acquisition and A.M.
Best’s discussions with the new majority owner, EFH, regarding new
management plans for ICPEI. The rating affirmations for ICPEI are based
upon its good risk-adjusted capitalization and generally favorable
operating performance. The affirmations also reflect the implicit and
explicit support ICPEI will now receive from EFH, including investment
and actuarial guidance as well as reinsurance protection.

These positive rating factors are partially offset by ICPEI’s exposure
to weather-related catastrophe losses and its geographic concentration
in the Canadian Maritime provinces.

Negative rating pressure could occur if there is deterioration in
ICPEI’s risk-adjusted capitalization or an unfavorable earnings trend
develops. Upward rating movement is not likely in the near term.

The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.